The varied landscape is given character by the abundance of small creeks and gentle valleys, as well as the profusion of native trees, shrubs and flowers. In physical terms, a degree of protection from winds blowing in from the ocean is the most important factor. The principal soil type is that of the ridge which runs from Cape Naturaliste to Cape Leeuwin; it is predominantly gravelly or gritty sandy loam that has formed directly from the underlying granite and gneissic rock. The soils are highly permeable when moist but moisture is quickly shed from sloping sites.[1]

Margaret River is the major geographical indication wine region in southwest Western Australia, with 5,017 hectares under vine and 215 wineries as at 2012.[2]Margaret River wine region is made up predominately of boutique size wine producers; although winery operations range from the smallest crushing 3.5 tonne per year to the largest around 7000 tonne. The climate of Margaret River is more strongly maritime-influenced than any other major Australian region. It has the lowest mean annual temperature range, of only 7.6C, and for good measure has the most marked Mediterranean climate in terms of rainfall, with only 200 millimetres of the annual 1160 millimetres falling between October and April. The low diurnal and seasonal temperature range means an unusually even accumulation of warmth. Overall the climate is similar to that of Bordeaux in a dry vintage.[4][5] Although the region produces just three percent of total Australian grape production, it produces over 20 percent of Australia's premium wine market.[6][7] The principal grape varieties are fairly evenly split between red and white; Cabernet Sauvignon, Chardonnay, Sauvignon blanc, Sémillon, Shiraz, Merlot, Chenin blanc and Verdelho.[4][8]

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There are no official Margaret River subregions, although in 1999 viticultural scientist Dr John Gladstones presented a paper suggesting there should be six subregions based on climate and soil differences namely: Yallingup, Carbunup, Wilyabrup, Treeton, Wallcliffe and Karridale.[9][10]

Cardiologist Dr. Tom Cullity planted the first Margaret River vines on the eight acres of land that he had bought for $75 an acre on Harman's Road south, in 1967. He named his property "Vasse Felix", a name the much-extended vineyard still bears today. The area known as Vasse was named after a French sailor named Thomas Timothee Vasse who was lost overboard off the coast in the area from the "Naturaliste" in 1801. The Margaret River area was chosen for what was at that time a highly experimental exercise through studies undertaken in 1955 by Professor Harold Olmo because of concerns about the viability of the Swan Valley wine industry, which was under attack from nematodes and virus diseases and whose future looked less than promising at the time. Dedicated and erudite research was performed by Dr John Gladstones from the University of Western Australia, whose childhood in the Swan Valley, family background in agriculture and surveying and his own studies and lectures in agronomy made him a highly qualified commentator. He published a paper in the Journal of the Australian Institute for Agricultural Science in 1961 which said in part "As far as the writer is aware, the Busselton-Margaret River region has never been seriously proposed as suitable for commercial viticulture. Nevertheless, a study of its climate shows that it definitely warrants consideration."[10][11]